Mandatory Radiation Oncology Payment Model on Horizon

A new mandatory payment model for radiation services is on the horizon for 2020, although it's still unclear exactly what the final model will look like.  

CMS and the Center for Medicare and Medicaid Innovation proposed the Radiation Oncology Model to test episode-based payments for radiology services to physician group practices, hospital outpatient departments, and freestanding radiation centers.

The goal of the model is to improve the quality of care for cancer patients while reducing costs and rewarding care that results in better outcomes for patients.

The comment period for the proposed new model closed September 16, 2019. If finalized as proposed, the spokesperson says the new payment model could begin in either January or April 2020. CMS would not comment on any changes or data collected during the comment period. The model is due to be tested for five years, concluding in December 2024, according to CMS.

CMS has been exploring avenues for episode-based payments since 2014, according to the agency, with Congress passing the Patient Access and Medicare Protection Act in 2015 in order to require a report on episode-based payments for radiation services. The report, published in November 2017, outlines three reasons why radiation therapy is targeted for this kind of payment model, and those included the lack of neutrality for payments, incentives that encourage volume over value for services, and coding and payment challenges. The agency says that the goal is to see whether episode-based payments will incentivize providers to deliver higher value radiation therapy. The report to Congress also notes that Medicare Part B spending on radiation therapy increased 216% from 2000 to 2010, and that spending varied widely across different location types. According to the report, Medicare paid 11% more for radiation therapy performed in freestanding clinics compared to hospital outpatient departments.

A spokesperson for CMS says payment for radiation services is currently done on a fee-for-service basis, but the proposed Radiation Oncology Model, if adopted as proposed, would provide lump payments at the beginning and end of a 90-day episode for radiation therapy treatment. The payments would not vary depending on whether the service was performed in a hospital outpatient department or freestanding radiation therapy center.

The 17 cancer types included in the model’s design account for 84% of all radiation therapy episodes, according to CMS. Questions that remain to be answered during the model’s trial period are whether episode-based payments could lead to shorter durations of radiation therapy, if care can be made more efficient, and whether Medicare beneficiaries will experience higher value care overall.

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Payment amounts will be determined based on national base rates, according to CMS, as well as trend factors and adjustments for case mix, experience, and geographical location. A discount factor will also be included, according to CMS, and will be a set percentage by which CMS reduces episode payment amounts. This would reserve savings for CMS and reduce beneficiary cost-sharing, according to CMS.

The message to payers

One of the main messages for payers when it comes to the proposed payment model is that since radiation services are a highly technical treatment performed during well-defined episodes, and because patient comorbidities rarely influence treatment delivery decisions, it is an ideal therapy for testing a prospective episode payment model.

“Under traditional fee-for-service payment, Medicare pays providers and suppliers for each individual service they perform and does not hold them accountable for patient experience," the spokesperson notes. “For radiotherapy, Medicare pays differently depending where the patient receives the care-a doctor’s office, a hospital outpatient department, or a freestanding radiation therapy center. The differences in payment rates incentivize Medicare providers and suppliers to deliver radiotherapy services in one setting over another, even though the actual treatment and care received by Medicare beneficiaries is the same in all settings.”

The new model would eliminate these payment differences, according to the spokesperson, and provide bundled payments for a 90-day episode of care to participating radiotherapy providers and suppliers. The goal of the proposed model is to preserve or enhance the quality of care for beneficiaries while reducing program spending at the same time.

“We believe that a model in radiation oncology would improve cancer care for Medicare beneficiaries and reduce Medicare expenditures,” according to the CMS spokesperson. “The latest clinical evidence suggests that shorter courses of radiation therapy for certain types of cancer would be equally effective and could improve the patient experience, potentially reduce cost for the Medicare program, and lead to reductions in beneficiary cost-sharing.”

Rachael Zimlich, RN, BSN, is a writer in Columbia Station, Ohio.